Hello,
I work for a construction company and we own a lot of equipment. I’m trying to figure out how to get equipment charged to a job. We have standard rates per hour for each piece of equipment which covers labour, standard maintenance, etc. But what journal entry would I do? We own the equipment, and don’t necessarily have the maintenance charges every month that are “standard” so I’m not sure where to offset the entry without creating an expense that is higher than actual.
We want to account for using the machinery, but I’m not sure what that entry would look like.
Is it best to make it like the company is renting the equipment to one of our jobs?
so CR Revenue, DR Expense(job) using a standard rate?
Or is this creating an expense that didn’t really happen (if we didn’t have maintenance for example) and I couldn’t justify this to the audit folks at year end?
Thank you
I work for a construction company and we own a lot of equipment. I’m trying to figure out how to get equipment charged to a job. We have standard rates per hour for each piece of equipment which covers labour, standard maintenance, etc. But what journal entry would I do? We own the equipment, and don’t necessarily have the maintenance charges every month that are “standard” so I’m not sure where to offset the entry without creating an expense that is higher than actual.
We want to account for using the machinery, but I’m not sure what that entry would look like.
Is it best to make it like the company is renting the equipment to one of our jobs?
so CR Revenue, DR Expense(job) using a standard rate?
Or is this creating an expense that didn’t really happen (if we didn’t have maintenance for example) and I couldn’t justify this to the audit folks at year end?
Thank you